There is a growing realization among supply chain professionals that no matter how hard present-day logistics’ systems work, they will never catch up with the growth of the overall economy. Thanks to an exponential increase in the no. of internet users (3 billion estimated) resulting in millions of on line transactions taking place every second, a big change is seen coming lightning fast to supply chains. The good news is that the churn of supply chains has already begun in response to this change. Researchers, retailers and consultants are nearly unanimous in their opinion that the traditional supply chains cannot keep pace with the e-commerce growth taking place in a increasingly automation-dependent world where speed and instant inventory availability are going to be the key deciding factors of success for businesses.
Automation of supply chain using robots is now regarded as an attractive and feasible option for small- and medium-sized businesses with limited automation skills and budgets. The use of robot automation system for storage and retrieval systems (AS/RS), conveyors, pack and hold processes, sorting, and tagging can practically eliminate any human intervention in a warehouse from order to pallet.
In a recently reported actual use case of robotic supply chain, the German chainsaw maker Stihl, ($1.3 bn in sales) uses 120 robots and works them 24 hours a day with only seven human co-workers per shift at its production facility in Virginia Beach, USA. The company reports that the cost to produce the chainsaw in the U.S. is only 1.8% more than the same Stihl chainsaw produced at the company’s facility in China. With Chinese wages rising, this 1.8% difference will soon be levelled off.
Skechers – the second largest footwear brand in the United States – uses Wynright’s next generation warehouse technology, costing $100 million. The technology consists of automated storage and retrieval system (AS/RS) from Japan-based Daifuku that enables the facility to handle up to 17,000 pairs of shoes per hour, more than double the amount handled by hand. The system offers enough automated equipment to run Skechers 70,000 SKUs from order to pallet with practically no human intervention. In addition, this resulted in 75 percent reduction in people! The ROI is just five years.
Baxter robot from Rethink Robotics, costing $25,000 with a lifespan of about three years, provides an economically attractive solution for SMEs. Rodon – a small injection molding factory – uses just one Baxter robot for grabbing plastic parts off the line, placing them in a box and separating them with inserts, then counting the items to make sure each box was exactly the same. With just one robot, Rodon replaced six employees (two on each shift). At $9.00 p/h, Baxter can pay for itself in just one year.
According to Atlanta, GA based Factory Automation Systems one robot costing $250,000 can replace two workers with combined salaries of $100,000. Result: over the 15-year life of the robot system, the machine pays back $3.5 million in labor and productivity savings. Robots incorporating latest technologies are now being increasingly employed at warehouses and distribution centers for performing tasks that were once solely done by humans.
According to a recent study in Robotics Business Review : “Although robots are expensive, they are plentiful and available for work; they thrive on repetitive jobs; they never strain themselves or suffer workplace injuries; they can work tirelessly 24/7 for 365 days a year – and can even work in the dark. Their cost to operate, amortized over five years or so, is on par with wages paid to workers in China. And they don’t require medical coverage or time off. That’s hard to beat! In fact, it can’t be beaten.”